Spencer’s Benefits Reports NetNews – June 12, 2015

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Kawa Orthodontics, LLP (Kawa), a large employer that prepared in 2013 for requirements under the employer mandate and allegedly lost the value of time and money when enforcement of the mandate was delayed until January 1, 2015, has filed a petition for a writ of certiorari before the Supreme Court. Kawa is asking the Supreme Court to overturn a decision by the Eleventh Circuit holding that Kawa did not have standing to challenge the extension of the mandate’s enforcement…

The Centers for Medicare and Medicaid Services (CMS) has issued a final rule designed to encourage stakeholder participation in the Medicare Shared Savings Program (MSSP), reduce the administrative burden for participating accountable care organizations (ACOs), facilitate efforts to improve health care outcomes, and maintain excellence in program operations. The final rule was published in the June 9 Federal Register…

During the first nine months of coverage, people insured by policies purchased through the Health Insurance Exchanges, or Marketplaces filled fewer prescriptions and spent less on prescription drugs than a comparison group with employer-sponsored insurance (ESI), according to a study published in Health Affairs. But there were noticeable differences between the earliest enrollees in Marketplace plans and those who enrolled later. Individuals whose coverage began in January 2014 filled more prescriptions than those whose coverage began in February or later months…

Subsidizing health insurance in order to make it more affordable for a significant part of the population—as does the Patient Protection and Affordable Care Act (ACA)—necessarily creates disincentives to work and earn, according to Casey B. Mulligan of the University of Chicago. Mulligan was among several witnesses who testified on June 3 before the Joint Economic Committee’s (JEC’s) hearing on the “Economic Effects of the ACA.” Under her analysis, elements of the ACA may push in the direction of more productivity and employment, but they are overwhelmed by disincentives elsewhere in the law…

With the implementation of the Patient Protection and Affordable Care Act, more Americans now have access to health insurance. However, results from the 2015 Aflac WorkForces Report reveal wide disparities between higher- and lower-income households in terms of financial preparedness, knowledge about health insurance and benefits enrollment. For example, 55 percent of employees in lower-income households (less than $50,000 in household income per year) are not prepared to pay for costs associated with an unanticipated serious illness or accident not covered by major medical insurance, compared with only 20 percent of employees in higher-income households (more than $100,000 in household income per year). This lack of readiness may present economic and health risks for households already walking a financial tightrope without a safety net to cope with increased medical costs…

Even though many health savings account (HSA)-qualified high deductible health plans will likely avoid Cadillac tax liability for several years, the regulatory uncertainty surrounding the implementation of the excise tax on high cost health plans could cause employers to eliminate payroll contributions to HSA accounts in order to avoid paying the tax, according to a recent report from the American Bankers Association’s HSA Council. More than 20 million Americans are covered by an HSA-qualified plan, and many of these Americans depend on employer contributions to the HSA to help manage the large deductible, the Council noted…

Health care insurers foresee larger increases in employer-sponsored plan premiums into 2016, with rising claims costs exceeding general inflation for at least the next 18 months, according to the Spring Healthcare Trend Survey from Wells Fargo…

According to an issue brief issued recently by the American Academy of Actuaries (the Academy), policymakers are advised to follow market reform principles for ensuring a sustainable health system should the U.S. Supreme Court hand down a decision in King v. Burwell that would prohibit premium subsidies in states with federally facilitated marketplaces (FFMs)…

Majority of employers want to promote mental well-being in the workplace

Eighty-four percent of employers believe they have a responsibility to provide a work environment that promotes mental well-being, according to a new Buck Consultants at Xerox survey report Promoting Mental Well-being: Addressing Worker Stress and Psychosocial Risks. The 2014 global survey—with a strong focus on companies in the United States, United Kingdom, Brazil and Singapore—found that more than one-third of employers rate the stress level within their organization as “high or very high.” Fifty-three percent of U.S. employers rate their stress levels as above average, with 33 percent saying that stress has increased over the last five years…

Reversing a district court decision that ordered an employer to pay out a monthly pension at the rate it estimated back in 1999, rather than the lower amount it arbitrarily determined was due in 2012, the Seventh Circuit U.S. Court of Appeals faulted the parties for failing to show their hands by calculating what the correct compensation actually should be. Although the employer clearly failed to explain to anyone, leastwise the court, the reasoning behind its new 2012 determination, the employee, who had the burden of production and persuasion as a plaintiff, also failed to offer calculations supporting the 1999 amount. Moreover, the district court erred by using the 1999 number without a determination that it was the right one. The judgment was reversed and the case was remanded. The case is Reilly v. Continental Casualty Co.…

A transition to full online functionality will be available to state-based Small Business Health Options Programs (SHOPs), allowing direct enrollment for 2015 and 2016 if certain criteria are met, according to Frequently Asked Questions (FAQs) released by the Centers for Medicare and Medicaid Services (CMS). The FAQs also discuss the use of Section 1311 grants to fund the establishment of SHOP online functionality…

The Centers for Medicare and Medicaid Services (CMS) has posted health insurance companies’ proposed rate increases of 10 percent or more for 2016 coverage year. The posting is intended to allow officials, experts, and the public to examine a health plan’s proposed increase in premiums before it is finalized. On RateReview.HealthCare.gov, interested parties are able to review submissions by health insurance companies for plans inside and outside of the Health Insurance Marketplaces in all states using HealthCare.gov, as well as some state-based Marketplaces…

The Pioneer accountable care organization (ACO) model produced net shared savings in both 2012 and 2013, although fewer than half of all ACOs earned shared savings in these years. According to a report (GAO-15-401) produced by the Government Accountability Office (GAO), ACOs that participated in both years reported higher quality scores in 2013. CMS has no evidence that beneficiary care has decreased in quality since the implementation of ACOs…

Spencer’s Benefits Reports NetNewsTM contains the latest news and developments in the employee benefits field for both health care and retirement plans. Taken from the daily news updates in Spencer’s Benefits Reports on the Internet, the items include legislative and regulatory actions, court case summaries, industry news, and analysis of new trends such as health savings accounts (HSAs) and Roth 401(k) provisions — anything that can affect the design, implementation and administration of an employee benefits plan.